A GOOD AFTERNOON AND WELCOME
BACK TO SUBCOMMITTEE.
FOUR TABLE DISCUSS THE
ADMINISTRATION'S PROPOSALS
REGARDING BUDGET RESERVES DEBT
AND PENSIONS.
THIS IS AN INFORMATIONAL HEARING
ONLY.
NO ACTION WILL BE TAKEN.
THIS IS ABOUT THESE PROPOSALS WE
MAY LATER IN THE PROCESS WE HAVE
A BETTER SENSE OF THE OF
REVENUES.
FOR TWENTY NINETEEN TWENTY
TWENTY WE WILL CALL THE STEPS
QUORUM PLEASE.
COOPER HERE.
TOO LACKEY --
THIS AREA WICKS.
WE'LL HEAR FROM EACH OF THE
THREE PANELS ALLOW MEMBERS TO
ASK QUESTIONS AFTER EACH PANEL
IT TAKE PUBLIC COMMENT AT THE
END.
OF THE SPEAKERS ON THE FIRST
PANEL REGARDING RESERVES CAM THE
TABLE PLEASE
[inaudible]
PLEASE PROCEED [inaudible]
OFFICE [inaudible]
TODAY FROM.
YEAH AND I'LL BE INTRODUCING
EACH OF THE THREE YEARS AND I AM
SITTING FROM BACK END UP.
SO -- YEAH.
WE DIE.
YOU GOVERNOR'S PROPOSAL
SPECIFICALLY --
I JUST TO START WITH A LITTLE
BIT OF A PICTURE OF THE OVERALL
STRUCTURE FOR THE GOVERNOR. FOR
THE FIRST.
WE ALWAYS ARE [inaudible]
BILLION DOLLARS.
THE GOVERNOR PROPOSES A PRETTY
MAJOR.
YEAH MY ABILITY [inaudible] TWO
FIRST IS PAYING TAO BUDGETARY
BORROWING THE SECOND
[inaudible]
LIABILITIES --
PROVIDES ROUGHLY FIVE BILLION
DOLLARS FOR ONE TIME SPENDING
THIS IS MONEY THAT WILL BE SPENT
IN TWENTY NINETEEN TWENTY THAT
THAT [inaudible]
YOU.
FOR AND THE GOVERNOR ALSO
PROVIDES TWO POINT SEVEN BILLION
DOLLARS IN ONGOING SPENDING
THAT'S MONEY THAT WOULD BE SPENT
TWENTY NINETEEN TWENTY AND THEN
EVERY YEAR AFTER.
THE FULL IMPLEMENTATION COSTS OF
THOSE ARE GOING FOR SCHOOLS IS
THREE FIVE FIVE DOLLARS.
TURNING TO THE NEXT CASE --
ON THE GOVERNOR'S RESERVE LEVELS.
WE GO.
OVER LOT.
OF EIGHTEEN BILLION DOLLARS.
INCREASE OF ABOUT TWO BILLION
DOLLARS RELATIVE TO THE EIGHTEEN
BUDGET ACT.
THAT WOULD BE ACROSS THE STATE.
THREE OF THE STATE'S RESERVES
THE BSA THE HALF OUR OFFICE HAS.
OPTIONAL SCENARIOS REGARDING HOW
MUCH.
WIRED TO COVER SOMETHING RELATED
TO A MILE OR A MODERATE
RECESSION.
AND WE FOUND THAT ASSUMING THAT
THE LEGISLATURE DOESN'T WANT TO
REDUCE SPENDING ARE INCREASED
REVENUE. FOR SESSION ABOUT
TWENTY TO FORTY BILLION DOLLARS
[inaudible]
FIRE.
OUR HIS ALTHOUGH PUBLICATION
FROM LAST NOVEMBER ALSO LOOKED
AT A COUPLE DIFFERENT SCENARIOS
AND FOUND THAT THREE BILLION
DOLLARS IN.
NEW SPENDING WOULD BE SUPPORT
PROVIDED AT THE STATE AND HER
THE REST OF THE SESSION SCENARIO
WITH TWENTY FIVE BILLION OR SO
IN LIGHT OF THIS WE THINK THAT
BUILDING MORE RESERVES RELATIVE
TO WHAT THE GOVERNOR PROPOSES OF
EIGHTEEN MILLION DOLLARS WOULD
BE -- THAT
WOULD BE PARTICULARLY IN THE
CASE OF THE LEGISLATURE AGREES
WITH THE GOVERNOR'S PROPOSAL TO
SPEND THREE BILLION DOLLARS.
I HAVE A QUICK QUESTION FOR YOU
THE LAST RECESSION THERE ARE
MANY MANY PROGRAMS THAT WERE
NEVER FULLY REFUNDED.
THE PRESENT DAY TODAY.
SO WE'RE STILL I MEAN IT IT
OBVIOUSLY --
RESERVES WERE COMPATIBLE BACK
THEN BUT EVEN NOW.
IF WE DID OTHER RECESSION.
OF THE WOLD BE CATASTROPHIC IN
MY IN MY OPINION.
CAN YOU RESPOND TO THAT.
YES AND I MEAN THE LAST
RECESSION INVOLVED HUGE MULTI
BILLION DOLLAR.
LOSSES AND BUDGET SHORTFALL.
THE RECESSION IN OUR ESTIMATES
WAS ASSOCIATED A HUNDRED AND
FIFTEEN MILLION DOLLARS
COLLECTIVELY ON THE BUDGET
SHORTFALL.
THAT RECESSION WAS OBVIOUSLY
VERY.
MOST ECONOMISTS YOU PROBABLY ARE
EXTREME ABOUT THAT YOU KNOW IS
THAT I WAS LIKELY TO OCCUR IN
THE FUTURE SO WHEN WE'RE LOOKING
EVERYWHERE --
YOU KNOW WILL CERTAINLY
LEGISLATURE COULD AIMS TO COVER
ABOUT IT.
FOR MAGNITUDE IT'S UNLIKELY THAT --
THE BUDGET SHORTFALL WOULD BE
QUITE THAT LARGE IT AGAIN IN THE
FUTURE [inaudible]
OKAY [inaudible]
FINANCE.
SUSAN WHAT KINDA DEPARTMENT OF
FINANCE THANK YOU SO CHAIR --
THE GOVERNOR'S BUDGET PROPOSES
PROPOSAL TAKES A BALANCED
APPROACH.
ON TO CONTINUES TO BE RESOLVES.
AND BETTER PREPARE THE STATE FOR
AN ECONOMY DOWNTOWN.
THE STATE'S RESERVES AS YELLOW
MENTION A COMPRISE OF THE RAINY
DAY FUND.
THE SAFETY NET RESOLVE.
AND A SPECIAL FUND FOR ECONOMIC --
ON COLLECTIVELY HAVE BOY
ESTIMATED TO HAVE A BALANCE OF
EIGHTEEN BILLION.
IN FISCAL YEAR --
NINETEEN TWENTY BALANCES IN
THESE RESULTS ARE AVAILABLE. TO
SUPPORT ANY STICK NEEDS --
I DO OF COURSE REGARD RESERVES --
ACTION A QUESTION OF THE SPECIAL
FUND FOR ECONOMIC UNCERTAINTIES
IS INTENDED TO COVER BUDGET
SHORTFALLS FROM RECESSIONS.
FROM OTHER NATURAL DISASTERS
SHOULD THERE BE A SEPARATE
DISASTER RESERVE FUND.
IF SO OR THE POSITIVE NEGATIVES
OF DOING SO.
CERTAINLY SO --
ONE THING THAT WE MENTIONED IN A
RECENT REPORT IS THAT THE
LEGISLATURE MIGHT WANT TO
CONSIDER SAVING.
BOTH FOR AN ECONOMIC RECESSION
AND FOR A NATURAL DISASTER
SHOULD THOSE THINGS OCCUR
SIMULTANEOUSLY AND WHEN WE HAVE
PRESENTED ESTIMATES OF YOU KNOW
RESERVE TARGETS IN THE PAST
THOSE GENERALLY JUST FOCUS ON A
RECESSION BUT IF.
YOU KNOW A HUGE FIRE ABOUT FOR
EXAMPLE HAPPENED AT THE SAME
TIME AS A RECESSION RESERVES
WOULD BE NEEDED TO COVER BOTH
SITUATIONS.
AND SO YOU KNOW THE EXACT FORM
SERVICE WERE SAVED COULD VERY --%
YOU COULD CHOOSE TO PUT IT ALL
IN ONE ACCOUNT YOU COULD CHOOSE
TO PUT IT IN SEPARATE ACCOUNTS
THE ADVANTAGE OF PUTTING IT IN
SEPARATE ACCOUNTS IS OF COURSE.
IT JUST HELPS SORT OF CLARIFY
YOU KNOW THE USE OF WHAT EACH OF
THOSE RESERVES TO BE INTENDED
FOR SIMILAR TO HOW HOUSEHOLD
MIGHT HAVE A SAVINGS ACCOUNT FOR
AN EMERGENCY IN A SEPARATE
SAVINGS ACCOUNT --
FOR SOMETHING ELSE SO --
IT IT MAY MIGHT BE HELPFUL BUT
AT THE YOU KNOW AT THE SAME AT
THE END OF THE DAY YOU KNOW
HAVING THE MONEY AVAILABLE IS
REALLY THE MOST IMPORTANT THING.
THE QUESTIONS FROM THE COMMITTEE%
[inaudible]
IF YOU.
THIS WILL THE PANEL OVER.
TO SUSAN I KIND OF WOULD LIKE TO
ADD SOMETHING TO ON THE SEPARATE
RESOLVE SURE UP SO WE APPRECIATE
THE THINKING BEHIND THE OPTION
TO CREATE A SEPARATE RESOLVE --
FOR PAYING FOR OTHER DISASTER
RELATED COSTS --
WOULD NOT THAT THE
ADMINISTRATION WOULD LIKE.
TO ME TO RETAIN AS MUCH
FLEXIBILITY AS POSSIBLE TO
ADDRESS STRAIGHT STATE NEEDS.
ON THAT CREATING A SEPARATE
RESOLVE FOR SPECIFIC PAPPAS
REDUCES THAT FLEXIBILITY --
WOULD ALSO NOTE THAT THE VAST
MAJORITY OF FINDING OUT OF THE
S. IF YOU HAS HISTORICALLY.
BEEN USED TO SATISFY THE NEEDS
THE STATE'S NEEDS FOR
EMERGENCIES NATURAL DISASTERS.
AND DISASTER RECOVERY --
THE END OF RECESSION IS NOT
ENOUGH WAS HE HOWEVER WE ARE
HAPPY TO CONTINUE HAVING ON
GOING DISCUSSIONS ABOUT THAT.
THANK YOU SIMILAR MANNER TO THE
DISASTERS WERE SEEING WITH THE
FIRES AND FLOODS OR IF INCREASED
DRAMATICALLY A MEMBER FOR
RESPONDING BACK TO FIRES BACK IN
THE LATE EIGHTIES EARLY NINETIES.
THERE'S DEFINITELY SMALLER
BECAUSE THAT THE COST --
FOR THESE DISASTERS WHY WOULD IT
LIMIT FLEXIBILITY IF YOU TO PUT
IN TWO SEPARATE FUNDS --
WE DO WE DO APPRECIATE --
THAT THEY HAVE BEEN DIFFICULTIES
IN THE ECONOMY BUT THE
ADMINISTRATION FEELS THAT.
THE RESULTS WE HAVE CURRENTLY ON
THE A MULTI PRONGED APPROACH THE
BUS APPROACH WE ARE TAKING
LOOKING AT THE LONG TOM.
IS.
IS IN TO TO A LARGE EXTENT
ADDRESSING SOME OF THESE NEEDS.
BUT I I GUESS WHAT I'M TRYING TO
WRAP MY ARMS AROUND GOING BACK
TO THE THE PREVIOUS RECESSION
HAVE A GREAT IT WAS.
HE STILL PROGRAMS THAT ARE
FUNDED RIGHT NOW TO THIS DAY IN
YEAH THE THE EXT RECESSION MAY
NOT BE AS IMPACTFUL AS IT WAS.
YOU KNOW THE PREVIOUS ONE STILL.
WE PROGRAMS ARE FUNDED SO I MEAN.
TO ME YOU CAN EVER HAVE A LARGER
LARGE ENOUGH RESERVE SO AND JUST.
TRAFFIC WE HAVE TO SEPARATE AND
NEVER GOT PROBLEMS RIGHT NOW
IT'S GOING TO BE WITH THE THE
ARCTIC BLAST WHATEVER IT'S
CALLED --
YOU KNOW WE'RE GONNA DO YOU HAVE
MORE PROBLEMS SO I AM NOT SURE
IF I AGREE WITH YOU TOTALLY ON
THAT BUT WOULD DO WE NOTED
[inaudible]
THANK YOU.
SO ON THE PANEL NUMBER TWO OKAY.
I'M SO PAGE THREE OF YOUR HAND
OUT INTRODUCES THE GOVERNOR'S OB
BUDGETARY BORROWING PROPOSALS AS
WELL AS OUR COMMENTS RELATED AND
RECOMMENDATIONS RELATED TO THOSE
PROPOSALS.
SO -- THE
GOVERNOR PROPOSES A TOTAL
BUDGETARY BORROWING PACKAGE OF
FOUR POINT FOUR BILLION DOLLARS
THAT BUDGETARY BORROWING BEING
OUTSTANDING AMOUNTS THAT THE
GENERAL FUND STILL OWES THAT --
IT USED TO BORROWING THAT USED
TO ADDRESS FOR FALLS IN THE PAST --
AT THE TWO MAJOR COMPONENTS OF
THE GOVERNOR'S PROPOSALS ARE TO
REPAY TWO BILLION DOLLARS
APPROXIMATELY TWO POINT ONE
BILLION DOLLARS IN SPECIAL FUND
LOANS.
AND THEN TO REPAY ONE POINT
SEVEN TO BUDGETARY DEFERRALS.
ARE THE SPECIAL FUND LOANS WOULD
THE GOVERNOR'S PROPOSAL WOULD
ELIMINATE WHAT IS AN EXISTING
MULTI YEAR PLAN TO ADDRESS THOSE
SPECIAL FUND LOANS OVER THE NEXT
FEW YEARS --
AND THEN WOULD REPAY THE
ENTIRETY OF THAT AMOUNT IN IN
NINETEEN TWENTY JUST USING
GENERAL FUND AVAILABLE RESOURCES.
ON THE ON THE TO BUDGETARY
DEFERRALS --
ONE IS A PAYROLL DEFERRAL AND
WHICH JUNE PAYROLL FOR STATE
EMPLOYEES AS REFLECTED AS IT
FROM JUST AN ACCOUNTING
PERSPECTIVE IN JULY.
ON THIS DOES NOT AFFECT WHEN
STATE EMPLOYEES ARE PAID --
AND THEN THE SECOND IS THAT THE
FOURTH QUARTER PAYMENT TO
CALPERS GOES OUT IN THE FIRST
QUARTER OF THE FOLLOWING FISCAL
YEAR JUST A FEW DAYS LATE.
I'M BOTH OF THESE ARE ACTUALLY
ASSOCIATED WITH ONGOING
BUDGETARY SAVINGS BECAUSE THE
YOU KNOW PREVIOUS JUNE'S.
PAYMENT FOR STATE EMPLOYEE
PAYROLLS ACTUALLY A LITTLE BIT
CHEAPER THAN THE UPCOMING JUNE
BECAUSE PAYROLL TENDS TO GROW
OVER TIME AND SO THAT.
THERE'S ABOUT A HUNDRED BILLION
DOLLARS IN SAVINGS EACH YEAR
THAT THE BUDGET ACCUMULATES AS A
RESULT OF THESE JUST ONGOING
ACTIONS.
SO WE HAVE TWO RECOMMENDATIONS
RELATED TO THE IS THE FIRST ARM
RELATED TO THE SPECIAL FUND
LOANS.
WE RECOMMEND THAT THE
LEGISLATURE PRIORITIZE HIGH
INTEREST LIABILITIES LIKE MAKING
A SUPPLEMENTAL PAYMENT TO THE
PENSION SYSTEMS OVER REPAYING
THE SPECIAL PHONE LINES OF THIS
YEAR.
AND THAT'S BECAUSE PENSION
PAYMENTS HAVE MUCH HIGHER
INTEREST RATES ASSOCIATED WITH
THEM SPECIAL FUND LOANS HAVE
VERY LOWER SOMETIMES NO INTEREST
AT ALL.
AND THE STATE COULD SAVE
HUNDREDS OF MILLIONS OF IF IT
PRIORITIZE THOSE HIGHER INTEREST
LIABILITIES.
LET ME KNOW DIFFERENT IN A A
HOMEOWNER CARDHOLDER PAYING OFF
THEIR HIGH INTEREST EXACTLY
EXACTLY.
I'M.
MORE AND THEN OF COURSE THE
STATE WOULD KEEP ITS CURRENT
PLAN THAT IT ALREADY HAS IN
PLACE TO ADDRESS THE SPECIAL FOR
MONTHS OVER THE NEXT FEW YEARS.
WE ALSO RECOMMEND REJECTING THE
GOVERNOR'S PROPOSAL TO UNDO THE
TWO DEFERRALS --
AND THERE ARE TWO REASONS FOR
THIS THE FIRST IS THAT
ESSENTIALLY IT BE YOU KNOW AS I
MENTIONED BEFORE THESE BOTH
INVOLVE SOME STATE SAVINGS THAT
ARE ON GOING.
BUT ALSO THE ADMINISTRATION HAS%
INDICATED THAT ONE OF THE
REASONS TO UNDO THESE DEFERRALS
IS TO PUT A TOOL BACK IN THE
TOOL BOX FOR THE STATE TO USE
AGAIN IN A FUTURE RECESSION.
THIS IS MORE LIKE A RESERVE
ACTION THAN IT IS LIKE A DEATH
ACTION.
AND SO AS A RESULT WE RECOMMEND
USING THAT ONE POINT SEVEN
BILLION DOLLARS IF YOU WANTED TO
BUILD MORE RESERVES WITH
ACTUALLY JUST PUTTING THAT MONEY
IN RESERVE BECAUSE YOU ARE IN A
LITTLE BIT INTEREST ON THAT
MONEY YOU WOULD JUST KEEP THE
STATE SAVINGS THAT ARE
ASSOCIATED FROM.
YEAR TO YEAR AND IT WOULD JUST
BE A LITTLE BIT MORE CERTAIN --
THAN THE UNCERTAINTY AROUND DO
ON DOING AND REDOING IT TO FOR
ALL.
HAPPY TO TAKE QUESTIONS.
FINANCE.
GREG BREAST DEPARTMENT OF
FINANCE --
THE GOVERNOR'S BUDGET IS
CERTAINLY TO THE DEBT SO WHILE
WE RECOGNIZE THERE ARE SEVERAL
DIFFERENT TRADE OFFS WHETHER
IT'S RETIREMENT LIABILITIES ARE
BUDGETARY DEBT OR PUTTING MORE
RESERVES SIDE --
THIS APPROACH WAS CAN EVEN
HANDEDLY RECOGNIZING ALL THE
DIFFERENT.
TO THAT GETS OUT THERE IN TRYING --
TO TO TAKE A A PLAN FORWARD THAT
WOULD PAY OFF CERTAIN THINGS AND
THEN ALSO ADDRESS SHORT TERM
WHICH IS MORE THE BUDGETARY
LOANS PAYING THOSE OFF.
IN THE LONG TERM DEBT OF THE
RETIREMENT --
PAYMENTS --
WHAT WE RECOGNIZE THERE ARE
DIFFERENT ING --
INTEREST PAYMENTS OR DIFFERENT
INTERESTS THAT LIABILITY
ASSOCIATED WITH THE DIFFERENT
TYPES OF DEBT --
FOR INSTANCE --
WELL THE THE LA --
STATED THAT --
PAYING OFF THERETIREMENT DEBT
OVER A CERTAIN NUMBER OF YEARS --
WITH MORE OF A A LARGER OF
PAYMENT WOULD WOULD HELP OUT IN
SEVERAL HUNDREDS OF MILLIONS
LATER -- IF
WE PAY OFF SOME OF THE DEBT SO
WE HAVE NOW THAT ARE DUE FOR THE
BUDGETARY LOANS THOSE PROGRAMS
THE NEXT COUPLE OF YEARS COULD
USE THOSE FUNDS --
TO FOR THEIR THEIR PROGRAMS
THINGS THAT HAVEN'T BEEN DONE
OVER THE LAST FIFTEEN TWENTY
YEARS BECAUSE IT ALONE TO BEEN
OUTSTANDING --
TO CERTAIN THINGS THE TO THAT
EXPRESS BACKED THEY WERE TRYING
TO BALANCE A VERY DELICATE.
TO A PRIORITIES AGREEMENTS AMONG
OF THE DIFFERENT PARTIES
INVOLVED
ANY QUESTIONS FROM THE COMMITTEE.
THIS ONE QUICK QUESTION IF THE
DECISION IS MADE TO PAY OFF
ADDITIONAL DEBT.
WHAT WOULD LEGISLATURE NEED TO
DO TO DIRECTLY MINISTRATIONS
TIMING OF PAYMENTS?
I DO DO YOU MEAN TIMING A
PAYMENT WITHIN THE FISCAL YEAR
CORRECT YEAH.
I'M AT SO YEAH THERE IS --
ONE IMPORTANT THING THAT I
DIDN'T MENTION IN THE
PRESENTATION HERE --
IS THAT THE ADMINISTRATION
PROPOSES MAKING MOST OF THESE
DEBT REPAYMENTS INCLUDING THE
SUPPLEMENTAL PAYMENTS TO THE
PENSIONS WHICH WERE AGENDA.
VERY EARLY IN THE FISCAL YEAR --
IN JULY --
OF THE TWENTY NINETEEN TWENTY
FISCAL YEAR AND THAT'S DESPITE
THE FACT THAT THE STATE'S MAJOR
REVENUE --
COLLECTION MONTHS ARE DECEMBER
JANUARY AND APRIL AND IT REVENUE
ESTIMATES ARE INHERENTLY ON
CERTAIN WE DON'T HAVE ANY
PARTICULAR REASON TO BELIEVE
THAT THIS ESTIMATE IS ANY LESS
ON CERTAIN THAN ANY OTHER YEAR.
BUT BECAUSE REVENUE ESTIMATES
ARE INHERENTLY UNCERTAIN WE
THINK IT MAKES SENSE TO WAIT
UNTIL LATER IN THE FISCAL YEAR
ONCE THE STATE HAS ACTUALLY SEEN
ITS COLLECTIONS --
TO MAKE THESE PAYMENTS SUCH THAT
WE CAN BE ASSURED THAT ON THE
REVENUES ARE GOING TO
MATERIALIZE THAT WE ANTICIPATE.
THANK YOU.
NO FURTHER QUESTIONS IN THE
COMMISSION WILL MOVE ON TO USER
MAY I ANSWER --
TO I MEAN AS FAR AS THE AT THE
GENERAL FUND CASH FLOW
MANAGEMENT.
WE DO.
LOOK THAT OVER VERY SERIOUSLY
VERY CAREFULLY EACH EACH YEAR.
AND WITH OUR BUDGETARY --
DEBTS AND EVERYTHING WE WANT TO
MAKE SURE THOSE ARE INCORPORATED
IN A TIMELY FASHION IN TERMS OF
OUR CASH FLOW PROJECTIONS.
CAN THE EARLIER IN THE YEAR THAT
MAYBE THE LARGER PAYMENTS GO OUT
THE MORE BENEFIT THEY WOULD HAVE
FOR THAT YEAR ESPECIALLY IF
YOU'RE INVESTING MONIES --
SO WE WOULD MAKE SURE THAT
THERE'S EQUAL WAITING ON ON SOME
OF THESE.
HE BACKS AND NOT ALL OF THEM ARE
FRONT LOADED BEGINNING OF THE
YEAR WE DO RECOGNIZE THAT --
SOME ARE ARE MORE LATER BUT
CERTAINLY WE TAKE A VERY --
FISCALLY PRUDENT APPROACH TO
EVALUATING THE CASH FLOW
PROJECTIONS.
AND ONCE WE DO THOSE AGAIN IN
JUNE WILL TAKE INTO
CONSIDERATION HOW THE FINAL
BUDGET ACTION ACTIONS TURNOUT.
THANK YOU BUDGET RAINY QUESTIONS
FROM THE COMMITTEE.
OKAY WELL THE PANEL NUMBER
.
THREE THE AFTERNOON PLEASE
[inaudible]
START [inaudible]
EVERY READY --
SO THE FOURTH PAGE OF YOUR HAND
OUT PROVIDES AN OVERVIEW OF THE
GOVERNOR'S PROPOSED --
DEBT REPAYMENTS RELATED TO
RETIREMENT SPECIFICALLY.
THERE ARE THREE PROPOSED
SUPPLEMENTAL PENSION PAYMENTS BY
THE GOVERNOR --
IN THE TWENTY NINETEEN TWENTY
BUDGET.
THE FIRST IS A THREE BILLION
DOLLAR SUPPLEMENTAL PAYMENT TO
CALPERS FOR STATE EMPLOYEES
RETIREMENT LIABILITIES.
THE SECOND IS A JUST OVER ONE
BILLION DOLLAR A SUPPLEMENTAL
PAYMENT TO CALL STIRS FOR
TEACHER PENSION RETIREMENT
LIABILITIES RELATED TO THE
STATE'S PORTION SPECIFICALLY
ABOUT LIABILITY.
AND THEN THE THIRD IS A TWO
POINT THREE BILLION DOLLARS
SUPPLEMENTAL PAYMENT TO CALL
STIRS BUT FOR THE DISTRICTS
CHAIR OF THE UNFUNDED LIABILITY --
JUST A COUPLE OF NOTES ABOUT
THESE --
SUPPLEMENTAL PAYMENTS THE WAY
THAT SUPPLEMENTAL PENSION
PAYMENTS --
SAVE THE STATE MONEY IS BY
ESSENTIALLY EARNING AN
INVESTMENT RETURN OVER TIME
ASSUME TO BE 7% OVER THE NEXT
FEW DECADES --
ON AVERAGE AND THEN AS A RESULT
RESULTING IN SLIGHTLY LOWER
EMPLOYER CONTRIBUTIONS OVER TIME
SO THIS RESULTS GENERALLY AND
THAT SAVINGS OVER TIME FOR THE
STATE.
THAT SAID ON THE STATE SAVINGS
ASSOCIATE WITH EACH OF THE
SUPPLEMENTAL PAYMENTS IS LIKELY
TO VERY.
OF FOR THE CALPERS --
PAYMENT OF THREE BILLION DOLLARS
THE SYSTEM ANTICIPATES THAT THAT
WOULD RESULT IN ABOUT SIX POINT
THREE BILLION DOLLARS IN SAVINGS
OVER THE NEXT FEW DECADES.
CAL STAR IS ALSO ANTICIPATE THAT
THEIR SUPPLEMENTAL PAYMENT WOULD
RESULT IN SAVINGS OVER THE NEXT
FEW DECADES BUT IN CONTRAST TO
CALPERS THERE'S AN ESTIMATED 20%
CHANCE THAT THE STATE WOULD NOT
ACHIEVE SAVINGS OVER THE NEXT
FEW DECADES.
AND THAT RATHER THOSE SAVINGS
WOULD BE ACHIEVED HOSTAGE.
TWENTY FORTY SIX SO ARE THE
FINAL PAGE OF THE HANDOUT DOES
PROVIDE SOME OF OUR COMMENTS
RELATED --
TO OF THESE PENSION PAYMENTS AND
THEN A COUPLE OF OPTIONS FOR
CONSIDERATION.
FIRST ON ON THIS CALPERS VERSUS
CAL STIRS ISSUE THAT I JUST
BROUGHT UP AN IMPORTANT THING TO
CONSIDER IS YOUR SORT OF
THINKING THROUGH THIS DYNAMIC IS
WHAT IS YOUR GOAL FOR THE
SUPPLEMENTAL PAYMENT.
ON THE ONE HAND ON THE
LEGISLATURE MIGHT HAVE THE GOAL
TO ADDRESS UNFUNDED LIABILITY
EQUALLY ACROSS THE SYSTEMS OR OR
ACROSS BOTH OF THE SYSTEMS.
IN WHICH CASE THE GOVERNOR'S
PROPOSAL WOULD MAKE SENSE THE
LEGISLATURE MIGHT ALSO HAVE A
GOAL TO MAXIMIZE STATE SAVINGS
OVER THE NEXT FEW DECADES IN
WHICH CASE A PAYMENT TO CALPERS
VERSUS CASTERS WOULD BE JUST
MORE LIKELY TO ACHIEVE BACK ON
I'M.
SECOND ON THE CALPERS PAYMENT
AND THE WAY THAT IT'S STRUCTURED
SPECIFICALLY.
SO THE SYSTEM ANTICIPATES THAT
THIS WOULD RESULT IN SIX POINT
THREE BILLION DOLLARS IN SAVINGS
IN TOTAL --
AND THAT THE GENERAL FUND WOULD
MAKE A THREE BILLION DOLLARS
SUPPLEMENTAL PAYMENT --
IN ORDER TO ACHIEVE THAT SIX
POINT THREE BILL BUT THE SIX
POINT THREE BILLION IN SAVINGS
WOULD ONLY ACCRUE TO THE GENERAL
FUND.
UNDER THE GOVERNOR'S PLAN --
AND THAT'S BECAUSE IT'S NOT ONLY
THE GENERAL FUND THAT MAKES
PENSION PAYMENTS IT'S ALSO OTHER
FUNDS LIKE THE FEDERAL FUNDS --
SPECIAL FUNDS AND THEN TRUST
FUNDS LIKE FOR EXAMPLE THE CSU
TRUST FUND.
SO THE SIX POINT THREE BILLION
UNDER THE GOVERNOR'S PROPOSAL
WOULD BE DISTRIBUTED THREE
BILLION FOR THE GENERAL FUND AND
THREE POINT THREE BILLION
APPROXIMATELY FOR THESE OTHER
FUNDS.
I'M WE JUST HAVE TO GLOSS OVER
SOME OF THE TECHNICAL DETAIL
HERE BUT WE HAVE AN ALTERNATIVE --
THAT THE LEGISLATURE MIGHT
CONSIDER.
THAT WOULD ESSENTIALLY MAXIMIZE
GENERAL FUND BENEFIT WOULD
PROVIDE SLIGHTLY MORE GENERAL
FUND BENEFIT.
IT WOULD REQUIRE THAT FUNDS THAT
BENEFIT FROM THE PLAN ALSO REPAY
THE GENERAL FUND FOR THEIR
PROPORTIONATE SHARE.
IT WOULD REQUEST THAT THE
FEDERAL GOVERNMENT AND FEDERAL
FUNDS --
REIMBURSE THE STATE FOR THE
BENEFIT THAT IT WOULD ARRIVE AS
A RESULT OF THE PLAN.
AND THEN FINALLY IT WOULD
MAXIMIZE BENEFIT TO THE MOTOR
VEHICLE ACCOUNT WHICH CURRENTLY
BENEFITS BY ONLY ROUGHLY THREE
HUNDRED MILLION UNDER THE
GOVERNOR'S PROPOSAL BUT WOULD
BENEFIT BY SEVEN HUNDRED MILLION
UNDER OUR OUR OUR ALTERNATIVE.
HAPPY TO TAKE QUESTIONS
[inaudible]
FINANCE.
I JUST HAVE A COUPLE COMMENTS
SAID I'D LIKE TO MAKE --
I SAID THEY ALEJO'S AB --
AT COMMENTS AND AND
RECOMMENDATIONS --
FIRSTLY I I'D LIKE TO POINT OUT
THAT THE ADMINISTRATION'S
PRIMARY GOAL IS TO ADDRESS BOTH
SYSTEMS --
UNFUNDED LIABILITY SO THIS THAT
REALLY SPEAKS --
TO THE RECOMMENDATIONS THAT --
THE STATE DIRECTOR OF THE
CASTERS PAYMENT TO CALPERS --
AND ALTHOUGH THERE'S A
PROBABILITY THAT THE SAVINGS
WILL BE ACHIEVED --
BY THE STATE SOONER FROM THE
CALPERS SIDE VERSUS THE CAL STAR
SITES BOTH PROPOSALS ARE REALLY
AIMED AT MAXIMIZING SAVINGS OVER
THE LONG TERM --
IN AND OUT TO THE YELLOW YES
POINT ABOUT --
DIRECTING THE AND RECOMMENDATION
DIRECTING THE CALPERS THREE
BILLION DOLLARS TO THE FIVE
STATE PLANS BASED ON THE
UNFUNDED LIABILITY OF EACH OF
THOSE PLANS --
AND REQUIRE THE REPAYMENT FROM
THE NON GENERAL FUND FUNDS --
AGAIN -- OUR
PROPOSAL IS TO AIMS AIMS TO
ACHIEVE THE SAVINGS IN THE LONG
RUN AND SPREAD THE BENEFITS --
MORE ACT EQUITABLY --
WHILE THE LA THOSE ALTERNATE
RECOMMENDATION WOULD INCREASE
GENERAL FUNDS APPROPRIATE SHARE
THE BENEFIT RESULTING FROM THE
PROPOSED PAYMENT WE NOTE THAT
THE CURRENT PROPOSAL ALREADY --
DEDICATES THE MAJORITY OF THE
BENEFIT TO THE GENERAL FUND --
ADDITIONALLY WE WOULD NOTE THAT
THE YELLOW ALEJO'S
RECOMMENDATION WOULD REQUIRE
THAT WE EVALUATE THE FEASIBILITY
OF THOSE OTHER FUNDS TO MAKE
REPAYMENTS --
AND AS YOU MAY REMEMBER --
IN TWENTY SEVENTEEN SB STE WHICH
MADE THE US SIX BILLION DOLLAR
SUPPLEMENTAL PENSION PAYMENT.
TO CALPERS AND WAS STRUCTURED IN
SUCH A WAY THAT WE HAVE FOR
OTHER FUNDS REPAYING THOSE LOANS
AS WELL AS A GENERAL FUND.
AND THEREFORE --
THE ADDITIONAL LOAN THAT WE
WOULD BE CREATING THROUGH THIS
PROPOSAL.
WOULD -- PUT
ADDITIONAL BURDENS ON THESE
OTHER FUNDS THAT SHOULD BE
GREATLY CONSIDERED.
I'M ALSO UNLIKE THE SPD FOR
SUPPLEMENTAL PAYMENT WHICH SAW
AN ALMOST IMMEDIATE REDUCTION TO
RETIREMENT CONTRIBUTIONS THE
CARD PROPOSAL IS EXPECTED TO
YIELD SAVINGS OVER THE LONG TERM.
WHICH MEANS IT COULD BE MORE
DIFFICULT FOR THESE FUNDS TO
ABSORB ANOTHER --
ANOTHER LONG.
AGAIN BACK TO MY POINT.
THANK YOU ARE PRISONERS FROM
CALPERS AND CAL STIRS.
OKAY EVERYWHERE SOARING IN
OREGON.
DOCTORAL OFFICE A CALPERS --
THE CALPERS ACTUAL OFFICE WAS
ASKED TO DETERMINE THE POTENTIAL
SAVINGS TO THE STATE PLANS OF
MAKING IS ADDITIONAL
DISCRETIONARY PAYMENTS TOTALING
THREE BILLION DOLLARS.
IN THE EIGHTEEN NINETEEN FISCAL
YEAR -- THE
SAVINGS RESULT DUE TO THE
REDUCED INTEREST BEING PAID ON
THE LOWER UNFUNDED LIABILITY
BALANCES.
OUR CALCULATIONS WERE DONE ON
BOTH THE DETERMINISTIC BASIS.
WHICH ASSUMES THAT THE FUND
WOULD EARN SOME PERCENT EACH AND
EVERY YEAR.
AND ON US TO CASTING SIMULATION
BASIS WITH RANDOMIZE RETURNS.
BASED ON OUR CAPITAL MARKET
ASSUMPTIONS WHICH TO ICAL
INVESTMENT VOLATILITY.
WITH RESULTS BROKEN DOWN BY
PERCENT OFFER THE THOUSAND
SIMULATIONS.
I ONE ADDITIONAL BENEFIT THAT WE
DO -- ONE
ADDRESS HERE TOO IS THAT WITH
CURRENT BENEFIT PAYMENTS --
EXCEEDING ANNUAL CONTRIBUTIONS
TO THE SYSTEM.
THERE IS A RISK OF THE SYSTEM OF
BEING FORCED TO SELL PRODUCTIVE
ASSETS.
AT AN INOPPORTUNE TIME.
AN ADDITIONAL BENEFIT TO THE
SYSTEM WOULD BE TO A SLIGHTLY
ENHANCE RETURN.
AS THE THREE BILLION DOLLAR
PAYMENT WOULD ASSIST OUR
INVESTMENT OFFICE IN MANAGING
THEIR LIQUIDITY CONCERNS.
AND WE'RE HAPPY TO TAKE ANY
OTHER QUESTIONS.
CUSTOMERS HI I'M DAVID I'M OVER
FROM CAL STIRS ADJUSTER WANTED
TO POINT TO YOU YOU STILL HAVE
RECEIVERS SOME HAND OUT WITH HIM
JUST GOING TO REFER TO THEM
BRIEFLY.
AND MOSTLY WHAT I WANTED TO TALK
ABOUT THIS AFTERNOON IS TO AGAIN
GO BACK TO THE CAN REFER BACK TO
THE COMMENT THAT MAYBE.
IT'S MORE LIKELY THAT SAVINGS
COULD BE ACHIEVED BY GIVING THE
MONEY TO CALPERS AND SORT OF
CALLOUS TO RISO HISTORICALLY
CALLOUSED SERVERS A COUNTRY TO
MOST ORDER PUBLIC RETIREMENT
SYSTEMS IN CALIFORNIA.
COSTUMES WAS NEVER THE CASTERS
BOARD WAS NEVER ABLE TO ADJUST.
CONTRIBUTION RATES IN ORDER TO
ACHIEVE FOR FUNDING.
THIS LED TO THE SITUATION WE'RE
IN TWO THOUSAND AND EIGHT TWO
THOUSAND AND NINE FOLLOWING THE
FINANCIAL CRISIS.
THAT COUNTS TO WAS WAS SCHEDULED
TO ACTUALLY.
THAT SITUATION LED TO THE
PASSAGE OF WHAT IS CALLED A D.
CASTERS FUNDING PLAN THROUGH
ASSEMBLY BILL FOURTEEN SIXTY
NINE AND TWO THOUSAND AND
FOURTEEN AND THROUGH THAT
PROCESS.
ALL OF CALISTO STAKEHOLDERS ALL
AGREED TO CHIP IN MORE AND ALL
CONTRIBUTE TO WORD.
OF MORE TOWARD CASTERS TO SOLVE
THE FUNDING SITUATION.
OUR MEMBERS AGREED TO PAY MORE
THE STATE AGREED TO PAY MORE AND
THE EMPLOYERS ALSO AGREED TO PAY
MORE.
AND WHAT ALSO CAME OUT OF THIS
WHICH WAS KEY IS OUR BOARD WAS
GRANTED FOR THE FIRST TIME EVER
THE AUTHORITY TO ACTUALLY SET
CONTRIBUTION RATES. TO ENSURE
FULL FUNDING LONG TERM BUT THIS
AUTHORITY WAS LIMITED AND THE
MAIN POINT I WANT TO MAKE YOUR
IT'S THIS LIMITED AUTHORITY THAT.
IS LEADING TO THE SITUATION THAT
IF WE DO RECEIVE MONEY FOR THE
STATE TO REDUCE THEIR SHARE OF
THE COST OF UNFUNDED LIABILITY.
SPECIAL OVER THE NEXT FEW YEARS
THE STATE MAY NOT BE ABLE TO
ACHIEVE SAVINGS EVERY YEAR OVER
THE NEXT FEW YEARS BUT THE
SAVINGS AS A THE REPRESENTED
FROM FINANCE QUOTED.
WILL ALWAYS BE OF ACHIEVE OVER
THE LONG TERM BUT THEY MAY NOT
BE ACHIEVED EVERY YEAR OVER TO
SHORTEN WHAT WE'VE BEEN TELLING
FOLKS IS.
BECAUSE OF OUR BOARD LIMITED
ABILITY TO SET CONTRIBUTION RATE.
IT IS UNCERTAIN FOR US WHEN THE
SAVINGS WILL BE ACHIEVED BUT
THERE WILL ALWAYS BE ACHIEVED
OVER THE LONG TERM.
SO WE HAVE. FOR MARVIN WE ARE --
WE ARE VERY WE WE LOVE THE IDEA
OF RECEIVING MORE MONEY FROM THE
STATE TO HELP BOTH EMPLOYERS AND
THE STATE INTO WHICH WAS
UNFUNDED LIABILITY.
AND JUST TO POINT OUT TO YOU IN
CASE YOU'RE INTERESTED WE HAVE A
SHEET HERE THAT HAS A LITTLE
PIGGY BANK AND A PIE CHART JUST
IN CASE YOU ARE INTERESTED.
AS OF THE MOST RECENT EVALUATION
WHERE WE RELEASE INFORMATION CAL
STARS AS AN UNFUNDED LIABILITY
OF ABOUT A HUNDRED AND SEVEN
BILLION DOLLARS.
OF WHICH SEVENTY ONE DOLLAR
SEVEN ONE MILLION ROUGHLY IS
DISH THE RESPONSIBILITY OF THE
EMPLOYERS.
AND THIRTY FIVE THE
RESPONSIBILITY OF THE STATE SAID
THE THE GOVERNOR'S PROPOSAL IS
TO APPLY.
ABOUT ONE POINT ONE BILLION TO
REDUCE THE THIRTY FIVE AND TWO
POINT THREE BILLION TO REDUCE.
TO SEVENTY ONE AND WITH THIS I
WOULD BE MORE THAN HAPPY TO
ANSWER ANY QUESTIONS YOU MAY
HAVE.
THANK YOU.
THE CALPERS UP LITTLE PENSION
PAYMENT PROPOSAL WOULD BENEFIT
ALL CALPERS MEMBERS.
SO WOULD ALSO BENEFIT CSU
EMPLOYEES.
I CAN TAKE THAT QUESTION --
SERVICIOS USE TREATED --
SIMILAR TO OTHER STATE
DEPARTMENTS THAT THE STATE
PROVIDES --
GENERAL FUND FOR OCCUPATION SO
CS USE EMPLOYEES ARE ACTUALLY
MEMBERS OF THREE STATE PLANS THE
STATE MISCELLANEOUS STATE SAFETY
AND STATE PEACE OFFICERS.
I'M IN TWENTY EIGHTEEN NINETEEN
THE SHARE OF THE GENERAL FUND
CONTRIBUTIONS OF TOTAL
CONTRIBUTIONS MADE TO CALPERS --
OR WILL BE MAKING TO CALPERS ON
BEHALF OF THE CSU IS AN
ESTIMATED 19% SO ASSUMING THAT --
EIGHT A 20% OF THOUGHT OF THE
SUPPLEMENTAL PENSION PAYMENT
SAVINGS ON WHICH IS WE PROJECT
AT SEVEN POINT TWO BILLION --
THE CS USE PROPORTIONATE SHARE
WOULD BE ABOUT ONE POINT FOUR
BILLION OVER THE NEXT THREE
DECADES.
THANK YOU FOR CHARACTERS.
ADMINISTRATIONS CAL STIRS
PROPOSALS PROVIDE COMPARABLE
FUNDING FOR THE CALPERS SCHOOL
CLASSIFIED EMPLOYEE POOL.
AND ALSO TAKE THAT QUESTION --
SO THE ADDITIONAL PAYMENT TO CAL
PURSES.
AT REALLY INTENDED TO PAY DOWN
THE STATE'S RETIREMENT
LIABILITIES WHICH YOU KNOW WILL
RESULT IN A SAVINGS TO THE STATE --
OVER THE NEXT THREE DECADES --
FOR COMPARISON THE CAL SERVICES
SIDE DEFINED BENEFIT PROGRAM HAS
A SIXTY TWO POINT 6% FUNDED
STATUS AND THE SEVENTY ONE POINT
FOUR BILLION UNFUNDED LIABILITY
WHERE AS THE SCHOOLS --
AT SCHOOL PLAN IS IS AT SEVENTY
TWO POINT 1% FUNDED WITH IT
TWENTY THREE POINT SIX MILLION
UNFUNDED LIABILITY.
OKAY THIS ONE MORE QUESTION SO
SORE THE TRADE OFF TO CONSIDER.
BETWEEN PROVIDING NEAR TERM.
AND LONGER TERM BUDGETARY RELIEF
FOR SCHOOL DISTRICTS.
SO THIS IS THE STATE RECOGNIZES
THE COST PRESSURES THAT ARE
FACING SCHOOLS AND THE PAYMENT
THAT -- WILL
BE MADE TO SUPPLANT AT SCHOOL
EMPLOYER SHARE --
ADDRESSES --
ONE OF THOSE LONG TERM COST
PRESSURE WITHOUT CREATING AN ON
GOING --
COSTS TO THE STATE --
WE ARE HOPING. TO PROVIDE THIS
THIS FUNDING --
TO ALLOW SCHOOLS TO HAVE SOME
TIME TO BETTER PLAN FOR THE
INCREASES IN RETIREMENT
CONTRIBUTIONS --
WE THINK THAT WAITING TO PROVIDE
THE RELIEF THAT WOULD PUT MORE
PRESSURE UP MORE MORE COST
PRESSURE ON THE SCHOOLS IN THE
IMMEDIATE TERM --
AND ALSO WE WANT TO NOTE THAT
THE LONGER WE WAIT TO ALLOCATE
THE SUPPLANTING PAYMENTS --
MORE OF THE THREE BILLION WILL
LIKELY BE NEEDED TO EFFECTUATE
THE SAME REDUCTION THAT WE'RE
HOPING TO ACHIEVE OUR WITH OUR
PROPOSAL.
HI THIS IS BECAUSE THE PAYROLL --
CONTINUES TO INCREASE --
OVER THE YEARS AND SO
CONSEQUENTLY THE THE THREE
BILLION THAT WERE PROPOSING. TO
TO MAKE A PAYMENT --
FOR CAN BE.
A MORE OF IT WOULD BE DEDICATED
TO WORDS --
PAYING DOWN THE WE'RE HOPING TO
TO ACHIEVE.
THANK YOU ANY QUESTIONS THE
COMMITTEE MEMBERS.
GOOGLE IN AN OPEN A PUBLIC
COMMENT.
THOSE WISHING TO SPEAK ON THIS
ITEM.
THANK YOU MISTER CHAIRMAN AND
MEMBERS.
GEN I SUPPRESS IT WITH THE
COMPANY SCHOOL EMPLOYEES
ASSOCIATION YOU'VE RAISED THE
EXACT QUESTION THAT.
WE ARE HERE TO TRY TO RESPOND --
AS YOU COULD IMAGINE FOR US WE
TWENTY TWENTY FIVE THOUSAND
PUBLIC SCHOOL.
CLASSIFY STAFF IN THE SCHOOL
POOL IN A PUBLIC SCHOOLS AND
COLLEGES.
AND THE PROPOSAL BEFORE YOU FROM
THE ADMINISTRATION WE TAKE OUR
GREAT IDEAS BECAUSE YOU WANT TO
BE ABLE TO DO WHAT YOU CAN TO
HELP.
REDUCE THE BURDEN IN THIS OP
SCHOOL DISTRICT.
BUT THEY DID LEAVE OUT THE
SCHOOL POOL FOR CLASSIFY STAFF.
AND WE HAD WOULD QUIT CALPERS TO
KIND OF COME UP WITH SOME OF
THESE COMPANIES.
OUR INITIAL INFORMATION FROM
SCOTT TORRES.
THE EQUIVALENT TO WHAT THE
GOVERNOR'S PROPOSING VOICE THIS
DOES PROGRAM FOR TEACHERS.
IS THREE BILLION DOLLAR WITH
SEVEN HUNDRED MILLION TO BUY
DOWN ESSENTIALLY 1% FOR THE NEXT
TWO YEARS.
THE EQUIPMENT NUMBER IS FOUR TO
CLASSIFY STAFF WOULD BE ONE
POINT ONE FIVE BILLION DOLLARS.
AND ABOUT A HUNDRED TWENTY FIVE
PER YEAR FOR THREE FIFTY FOR TWO
YEARS.
THOSE ARE THE NUMBERS COM COMING
FROM CALPERS.
AND I WOULD POINT OUT THAT TWO
MORE ISSUES JUST TO BE BRIEF.
ONE IS THAT HISTORICALLY WHEN
THE RATES WERE DROPPING THE
SCHOOL SYSTEM WAS BUILT ON A
REVENUE LIMITS SYSTEM IN WHICH
ONE REVENUES OF FOUR POSE
PENSION WENT DOWN.
THE STATE WAS ABLE TO RECAPTURE
THE SAVINGS.
AND THEN WHEN HE WENT UP SHE WAS
SUPPOSED.
TO DO THAT BUT ONE THAT SCHOOL
SYSTEM WENT TO ALL THE HAVE
HISTORICAL KIND OF PROMISE.
HIS JIM JUST EMBEDDED NOW SO
IT'S GONE IN TERMS OF HOW WOULD
YOU ADDRESS AND I THINK NO ONE
REALLY TOP WE WERE GONNA GO PAST
THIRTEEN POINT --
TO DUSTIN MAGIC.
NUMBER THAT WAS SET BACK IN
NINETEEN EIGHTY TWO THIRTEEN
POINT 002% THAT WE WOULD HAVE
THIS KIND OF BACK AND FORTH TO
STATE WHAT BACK FEEL.
OF COURSE NOW WE'RE AT 18% IN
EIGHTEEN NINETEEN WE'RE GOING
ALL THE WAY UP TO TWENTY FIVE
POINT 7%.
IN TWENTY FOUR TWENTY FIVE
THAT'S ONE REASON WE ARE FACING.
JUST AS MUCH AND MORE PRESSURE.
SECOND I SHARE WITH YOU THE
HISTORICAL THE SUNLIGHT LCF DOES
NOT CAPTURE IT IS THE FUNDING
FOR SCHOOLS NO LONGER CAPTURES
THIS AND WE WOULD.
ASK FOR YOU HELP TO DO THIS.
AND THIRD.
THERE'S A NEGATIVE IMPACT TO MY
MEMBERS IN PARTICULAR BECAUSE
NOW.
YOU ARE FACING RISING COSTS FOR
EVERY NEW HIRE OF A CLASSIFIED
EMPLOYEE YOU MIGHT BE SLIGHTLY
READ.
RELUCTANT BECAUSE EUROPE ON A
FACE RISING COSTS AND SO WE
THINK YOU KNOW FOR AS LITTLE AS
A HUNDRED TWENTY FIVE MILLION
DOLLARS A YEAR.
YOU COULD DO THE SAME THING FOR
A MEMBERS ALSO AND WE WOULD ASK
FOR YOUR INTERESTS AND YOUR YOUR
REVIEW OF THIS PROPOSAL WE'RE
ENGAGING ADMINISTRATION WERE
ASKING WHY TO SCHOOL POOL WAS
NOT ADDRESS.
ANYTHING SOME OF THAT EARLY
CONVERSATION LOOKS POSIT MORE AS
WE SEE MORE THE REVENUES BUT WE
WOULD URGE YOU TO SET THE SOME
ON A SITE TO HELP.
TO HARD WORKING CLASSIFIED
SCHOOL EMPLOYEES ALSO THANK YOU
THANK YOU.
GOOD AFTERNOON JENNIFER BAKER
WITH THE CALIFORNIA TEACHERS
ASSOCIATION --
APPRECIATE THE THE COMMENTS OF
MY COLLEAGUE WITH CSEA HOW WHAT
I DIDN'T WANT TO KNOW IS WE
ABSOLUTELY SUPPORT AND
APPRECIATE --
THE GOVERNOR'S CREATIVITY IN THE
PROPOSAL HE THAT HE'S PURPORT
CALC STIRS WE DO SUPPORT A AND
WE THINK IT THAT IT'S VERY
FISCALLY PRUDENT WE WE DISAGREE
WITH THE LA --
WHILE WE APPRECIATE NUMBER IN
THE COMMENTS HOW WE DISAGREED
THAT WE SHOULD WAIT TO
ADDITIONALLY AND PROVIDE THE
SEVEN HUNDRED MILLION FOR A
SCHOOL DISTRICTS AND WE BELIEVE
THAT SOMETHING THAT'S NEEDED NOW --
I DO WANT TO NOTE --
BECAUSE IT'S NOT SOMETHING
THAT'S PER THAT --
THE PROPOSAL BUT I KNOW CAL
STIRS WOULD VERY MUCH LIKE TO
HAVE INCREASED HEART RATE
SETTING AUTHORITY AT THE
TEACHERS RETIREMENT BOARD LEVEL
AND THAT'S SOMETHING THAT
STAKEHOLDERS WERE ADAMANTLY
OPPOSED TO WHAT WE DO APPRECIATE
THE DILEMMA THAT IT PUT TO
TEACHERS RETIREMENT BOARD IN.
IT DOES HAVE AN IMPACT ON PROP
NINETY EIGHT AND SINCE IT'S THE
LEGISLATURE'S PURVIEW TO SET
EDUCATION FUNDING AND HAVE A
DISCUSSION OVER THE RIGHT WAY TO
MAKE SURE WE'RE FINDING IN OUR
SCHOOLS WE DON'T BELIEVE IT'S
APPROPRIATE FOR THE CHARACTERS
BOARD TO INCREASE.
THE RATE SETTING AUTHORITY THAT
THEY HAVE --
THAT WAS ADDED INTO A. B. FORTY
OUR THOUGHTS ABOUT CHANGING THAT
BECAUSE IT DOES HAVE AN IMPACT
ON EDUCATION AND THAT BOARD --
WHILE THEY DO VERY MUCH CARE
ABOUT TEACHERS RETIREMENT DON'T
UNDERSTAND THE COMPLEXITIES OF
EDUCATION FUNDING AND AS YOU
KNOW MANY THESE PENSION ISSUES
TO HAVE AN IMPACT ON EDUCATION
FUNDING AND WE WANT TO MAKE SURE
THAT THE LEGISLATURE RETAINS ITS
PURVIEW SO.
WE WOULD ENCOURAGE CONVERSATION
ABOUT TRYING TO DO ANYTHING THAT
WE CAN TO HELP CAL STIRS TO BE
IN A BETTER FIDUCIARY --
LEVEL -- AND
WE WOULD ENCOURAGE YOU TO AT
MOVE THOSE CONVERSATIONS FORWARD
AND WE'RE HAPPY TO HELP OUT IN
ANY WAY WE CAN THANK YOU.
THANK YOU.
THIS BRINGS OUR HEARING TO
INCLUDING ON THANK OUR WITNESSES
AND OUR SPEAKERS AND HAVE A
GREAT DAY